Prescription Drugs:

Automated Prospective Review Systems Offer Significant Potential Benefits for Medicaid

AIMD-94-130: Published: Aug 5, 1994. Publicly Released: Aug 22, 1994.

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Pursuant to a congressional request, GAO reviewed states' use of information technology in implementing their drug utilization review (DUR) programs, focusing on the: (1) effectiveness of using automated systems to perform prospective reviews; and (2) extent to which the Health Care Financing Administration (HCFA) has encouraged the use of automated prospective DUR systems.

GAO found that: (1) although not required to, two-thirds of the states and the District of Columbia plan to establish statewide automated prospective DUR systems to detect inappropriate drug therapy for Medicaid patients and reduce unnecessary drug and hospitalization costs; (2) estimates of inappropriate drug therapy range from 3 percent for the general population to 28 percent for the elderly; (3) in the five states reviewed, prospective DUR systems detected and cancelled almost 400,000 prescriptions that either posed a serious health risk or represented potential program fraud or abuse; (4) implementation of automated prospective DUR systems would be cost-effective, since they are relatively inexpensive and could potentially save millions of dollars, particularly by preventing unnecessary hospitalizations; and (5) HCFA has taken some action to encourage use of automated prospective DUR systems, but states want HCFA to provide more information on costs, benefits, and system capabilities to aid them in acquiring and implementing the systems.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: HCFA agrees with the recommendation and continues to study automated prospective DUR systems through its Iowa demonstration project and annual reports submitted by the states. HCFA has shared some information with the states and provided some guidance on assessing the benefits of these systems. In addition, its August 1996 DUR newsletter included some best practices of effective automated DUR system design, as reported by the states. However, HCFA does not plan to provide the states with guidance on desirable system features or capabilities other than to share information on distinctive features as contained in the states' annual reports. Further, GAO/AIMD-96-72 contains a new recommendation to HCFA that supersedes this recommendation.

    Recommendation: To increase patient safety and the potential for significant program savings, the Secretary of Health and Human Services should direct the Administrator, HCFA, to: (1) gather information on the costs and benefits of automated prospective DUR systems; (2) develop guidance on desirable features and capabilities for these systems; and (3) provide this information and guidance to all states.

    Agency Affected: Department of Health and Human Services


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